Ohio Valley Banc (NASDAQ:OVBC) Has Re-Affirmed Its Dividend Of US$0.21

By
Simply Wall St
Published
January 23, 2022
NasdaqGM:OVBC
Source: Shutterstock

Ohio Valley Banc Corp.'s (NASDAQ:OVBC) investors are due to receive a payment of US$0.21 per share on 10th of February. Based on this payment, the dividend yield will be 2.8%, which is fairly typical for the industry.

See our latest analysis for Ohio Valley Banc

Ohio Valley Banc's Payment Has Solid Earnings Coverage

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, Ohio Valley Banc's earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share could rise by 12.9% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the payout ratio will be 25%, which is in the range that makes us comfortable with the sustainability of the dividend.

historic-dividend
NasdaqGM:OVBC Historic Dividend January 22nd 2022

Ohio Valley Banc Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. There hasn't been much of a change in the dividend over the last 10. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see Ohio Valley Banc has been growing its earnings per share at 13% a year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Ohio Valley Banc Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Ohio Valley Banc stock. We have also put together a list of global stocks with a solid dividend.

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